MOL to defend itself against Croatian steps to arrest CEO

BUDAPEST (Reuters) - Croatia's legal steps against the chief executive of Hungarian oil and gas group MOL are against EU law and MOL will defend itself by all legal means, MOL said on Wednesday.

Croatia has already found former Prime Minister Ivo Sanader guilty of accepting a bribe in 2008 from MOL in exchange for granting it a dominant position in oil and gas firm INA, without it buying a majority stake.

Sanader appealed and he and MOL deny the allegations, but Croatia on Tuesday was reported by state news agency Hina to have issued an Interpol and European arrest warrant for MOL chief Zsolt Hernadi. Officials in Croatia were not immediately available to confirm the issuance of the warrants.

"Whilst Croatia may be at liberty to do so under national law, we maintain that the manner in which the Croatian authorities are currently proceeding is in contradiction to supra-national European law ...," MOL said in a statement.

It said Croatia was now bound to the European Union legal system after entering the bloc this year.

It would defend itself against what it called outrageous actions that appeared to be influenced "by interests seeking to intimidate both the company and its Chairman", MOL added.

The warrants came after Hernadi failed to appear for questioning in Zagreb last month. A Croatian court issued a detention order last week, a precondition for an international arrest warrant, citing flight risk.

A Hungarian professor in international law, Laszlo Valki said he believed Hernadi did not face the risk of being arrested as long as he remained in Hungary. He said any Croatian European Arrest Warrant would go to the Budapest Court of Justice.

"The court has the right to reject the implementation of the warrant because - according to the EU framework decision and Hungarian law - if Hungarian authorities had conducted an investigation into this issue and closed it, the court can refer to this, and reject the European Arrest Warrant," Valki said.

STRAINED TIES

He said the Interpol warrant was to prepare for extradition, but that Hungary, like other countries, did not generally extradite its own citizens and had no obligation to do so.

Hungary has already found that neither MOL nor its officials took part in the alleged bribery. The prosecutor's office said a copy of the Hungarian probe had been sent to Croatia.

A spokesman for the Hungarian chief prosecutor's office said the office did not know of new warrants for Hernadi. Hungary has refused two Croatian requests to question him on legal grounds.

MOL and Croatia, whose relations have been strained, began negotiating a new INA shareholder deal last month.

MOL owns close to 50 percent of INA, while the government owns almost 45 percent. Croatia says MOL's management rights are excessive and that MOL has failed to invest adequately in INA.

MOL has said it would not give up management control of INA, and wants to invest in the Croatian company, but authorities have failed to issue necessary permits.

MOL shares were down 1.9 percent at 15,690 forints at 0942 GMT, while the wider market was down 1.1 percent.